The International Finance Corporation (IFC), the largest international financial institution in Myanmar’s private sector, fosters sustainable economic growth by financing and mobilizing capital for private sector projects. As a member of the World Bank Group, IFC helps creating jobs by supporting infrastructure and agriculture projects and advises Myanmar’s government on business reforms to improve the investment climate and access to finance. Vikram Kumar, country manager of the IFC in Myanmar, discusses IFC’s portfolio and Myanmar’s private sector prospects.
European Times: On which pillars is IFC’s portfolio focused?
Vikram Kumar: Since its re-engagement in Myanmar in 2012, IFC has invested US$390 million, which we plan to double to around US$600 million by the end of 2016 and US$800 million by June 2017. Following the Country Partnership Framework, we focus primarily on infrastructure, mainly power and transportation and telecommunication; development in the financial sector by microfinancing institutions and non-banking financial institutions on the long term; and services and job creations, mainly in tourism, agriculture, property and small scale manufacturing.
European Times: How would you describe the agriculture sector?
Vikram Kumar: Agro-processing will be Myanmar’s biggest competitive advantage, since in terms of agriculture, the country has better potential than many others. As a producer Myanmar has several advantages, such as excellent arable land, abundance of water and location between two huge markets. In terms of products, Myanmar should focus on rice and pulses since they have experience in exporting them are able to provide large quantities. Supporting agribusiness is one of the IFC’s priorities, as it helps increase rural income and promotes inclusive growth for about 70% of the country’s labour force.
European Times: What types of projects is the IFC looking for and in which projects is it currently involved in?
Vikram Kumar: IFC looks for sustainable projects that yield financial returns for investors while paying development dividends for the people of Myanmar. The decision making factor is definitely the sustainability of the proposed project, but we analyze capacity exchange, financial ability to deliver, adaptability to changes, audits, financial statements, governance structure, management team and other factors. Besides the capital, companies working with IFC mostly value the advice, assistance and support we offer in the transition process.
As for current projects, IFC is providing a loan of US$58 million for the 225 MW combined cycle gas turbine power plant in MyinGyan, a US$304 million project developed by Sembcorp Utilities Pte Ltd and MMID Utilities Pte Ltd. Furthermore, US$10 million will be provided for the Hmawbi Agricultural Input Complex, a formulation plant for crop protection products built by Myanma Awba Group. Creating 500 jobs, it will be the first and only modern crop protection plant that meets environmental criteria and will support a grower base of more than three million farming families.
